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VesselsValue Offshore Featured in Tradewinds

VesselsValue has spent five years honing its skill in general shipping and now turns its hand to offshore

Darrin Griggs Oslo (http://www.tradewindsnews.com/weekly/486738/big-data-meets-osv-values)

London-based VesselsValue has today rolled out a new online service aimed at the daunting task of giving accurate values, with daily updates, for the world’s entire fleet of offshore support vessels (OSVs).

While asset values are the core of the service, it also includes live, interactive maps of OSVs with a wealth of data per ship. A unique feature is that the OSVs can be overlaid on detailed maps of the infrastructure they serve, such as wells, rigs, pipelines, platforms and licence blocks around the world (see story, right).

Using statistical regressions to achieve a “bell-shaped curve” of results, the company is able to crunch big data via an algorithm to peg OSV values within an accuracy of 10%, indicates VesselsValue offshore manager Miles Cole.

And the service already has plenty of data to crunch. Cole says he and his team, including more than 40 analysts, have spent the past 15 months gathering 96 separate lines of data per ship for a whopping 7,200 offshore ships.

Of the total database, about 6,000 of those are platform supply vessels (PSVs) and anchor handling tug supply (AHTS) vessels, while the other 1,200 are fast support vessels (FSV), emergency response and rescue vessels (ERRVs) and oceangoing tugs.

Cole says VesselsValue has approached some large OSV fleet owners who have expressed “shock” at the sheer amount and detail of data it has collected on these ships.

“If a vessel is sold the night the before, we look to be within 10% on either side of the valuation accuracy on that bell-shaped curve. In terms of accuracy for anchor handlers and PSVs, we are in that region now,” Cole told TradeWinds, adding that the service is set to improve as the data grows.

As proof, Cole points to the historical sale of a Solstad vessel. Working from the data today, VesselsValue’s algorithm predicted a price of $18.66m for the sale of the 10,880-bhp AHTS vessel Nor Captain (built 2007), which went for $19m in June 2012.

Cole uses the example of the past sale because so few sales are happening now. With the help of brokers and owners, his team has registered about 660 trading sales from 1990 to 2016.

Broker valuations are the next best thing to trading sales, in terms of the way they feed data into the algorithm to develop accuracy and make comparisons, says Cole. So they also compare the algorithm’s results to 3,000 to 4,000 vessel valuations from offshore brokers.

VesselsValue is entering offshore at a critical time for valuations. Just about everyone in the industry knows OSV values are way down from book values and most owners, if not all, have been forced into large write-downs.

As these assets are connected to loan covenants, values are one of the most watched data points. And in today’s market, producing valuations is no mean feat, because of the severe downturn, lost charters and hundreds of layups, not to mention an extreme lack of trading sales, especially for newer ships.

Pegging asset values, with accuracy, for thousands upon thousands of individual OSVs is a “big data” promise that is certain to meet a wall of scepticism in the offshore sector — but it will not be the first such wall VesselsValue has encountered.

VesselsValue has spent the past five years building up in general shipping, for tankers, bulkers and the like. As a spin-off of Richard Rivlin’s sale-and-purchase specialist Seasure Shipbroking, the company entered general shipping back in May 2011.

It was also at a low point in the cycle and the company encountered its share of sceptics, says VesselsValue communications manager Claudia Norrgren.

“It has taken awhile but people are seeing the value of having this type of data instantly and in having the level of transparency that the market just never was provided before,” said Norrgren.

Today, it generates in the region of 50,000 live valuations daily and also counts about 80% of the world’s shipping banks among its customers, which includes also lawyers and finance houses.

TradeWinds cites VesselsValue on a regular basis in its stories. Some users say its values are “extremely close” in markets with a high volume of trading sales, such as tankers and bulkers, and show “good accuracy”, around 10% deviance in other markets with fewer trading sales, such as LNG and LPG.

Now, the aim is to duplicate the success for vessels in the oil-and-gas industry but the valuation algorithm is especially tailored for offshore vessels, and it is much more complex than many sceptics may first believe.

For the 96 rows of data per ship for the 7,200 OSVs, VesselsValue has detailed all the points that offshore brokers tend take into account for valuations, based on help from unnamed offshore brokers in seven global regions and shipowners, as well.

Along with obvious capacities like dwt, bollard pull and so on, the 96 separate data rows range from the ship design, to the engine type, to the under-deck tanks, to the generators, to winches, to navigation and communications systems. A value weight is given for the country of the equipment’s origin, the yard that built the ship and for the owner that ordered it, or for the owner that sold it.

In addition to these many features, Cole says VesselsValue has also found a high correlation with the oil price, which influences the predicted value by about 80%.

But why go into offshore?

“All of our clients have been asking for it,” said Norrgren.

“When you see values falling and no one can give an answer about where values actually are, then there is a huge gap in the market. There is a gap for clear, transparent valuations for people who have lots of different vessels on their portfolios and orderbooks. We see huge demand from existing and potential clients.”